Getting divorced typically involves significant financial changes for both spouses. While it can be difficult to think practically at such an emotional time, each party must accept that dissolving a marriage has long-lasting financial repercussions and prepare accordingly. The four steps below will take some time and effort, but put you in a better position as you move forward.
Step One: Hire a Divorce Attorney
Hire an attorney as soon as possible. Not only will he or she represent you in the divorce process, but they can also send communications on your behalf regarding financial matters. For example, if you and your spouse both have your names on a line of credit, the liability is 50/50, even if your soon-to-be-ex spends $10,000 on personal indulgences to spite you. Your attorney can send him or her a certified letter that could later motivate a judge to award you damages during a settlement proceeding.
Step Two: Organize All Your Important Financial Documents
As soon as the decision is made to divorce, collect key financial documents such as:
- Bank account statements
- Credit card bills
- Retirement account paperwork
- Tax returns
If possible, try to go back at least three to five years. Some spouses have been known to siphon money out of a joint account months or even years before revealing their intention to file for divorce.
Step Three: Check Your Credit Report
No one should be hit with someone else’s liability after a divorce. Pull your credit report and check it carefully for credit card accounts, lines of credit, loans, and other items you don’t recognize. If you notice anything unusual, bring it to your attorney’s attention immediately.
Step Four: Establish Financial Independence
Prepare yourself for financial independence by doing the following:
- Remove your spouse’s name from your bank accounts and credit cards
- Close any joint bank accounts, credit cards, or lines of credit
- Remove him or her as a beneficiary on your retirement plans, pensions, and life insurance
- Disinherit him or her in your will, medical directive, trust, and other estate planning arrangements
- Open a new bank account and credit card in your name only
Protect your future security by making careful, strategic financial decisions before the divorce process commences and when negotiating your divorce settlement. The Law Office of Arnold, Wadsworth & Coggins will advise you as to how you can establish financial independence and set yourself up for success in your newer, brighter future.
